We have shown that the neurotropic virus, Theiler's encephalomyelitis virus (TMEV), replicates to a much higher degree and causes more extensive demyelination in the CNS of mice genetically lacking the protein tyrosine phosphatase SHP-1 compared to wild type mice expressing SHP-1. Further, oligodendrocytes isolated from these mice replicate TMEV to higher levels in vitro than oligodendrocytes of normal littermates containing SHP-1. This indicates that SHP-1, which we have shown is expressed in CNS glia including oligodendrocytes, plays a role in resisting replication of TMEV in these cells and may relate to increased demyelination seen in infected SHP-1-deficient mice. SHP-1 has been shown to control mitogen-activated protein kinase (MAPK) activities arising from growth factor or neurotrophic factor receptors. Preliminary data show that SHP-1 controls constitutive Erk1/2 activation in CNS oligodendrocytes. Activation of multiple MAPK pathways has been shown to promote numerous classes of viruses. We propose that a main role for SHP-1 under the control of a virus-inducible promoter in CNS oligodendrocytes is to modulate MAPK pathways during TMEV infections thus effectively limiting virus replication. In the absence of SHP-1, we hypothesize that TMEV fully utilizes MAPK to promote virus replication. As such, SHP-1 may be considered an important antiviral state gene in the CNS. Since induction of SHP-1 is believed to be primarily epithelial cell-specific, we believe that these studies will be particularly relevant to the microglial populations of the CNS including oligodendrocytes and astrocytes, which are epithelial in origin. However, the role of constitutive expression of SHP-1 through the constitutive hematopoietic promoter in resisting TMEV infection will also be analyzed because these cells are also important targets for TMEV in the CNS. Finally, we show that expression of a virus-inducible anti-viral state gene, inducible nitric oxide synthase (iNOS), and its product nitric oxide is profoundly and specifically deficient in oligodendrocytes and astrocytes of SHP-1-deficient mice compared to those of normal littermates indicating a severe defect in this important anti-viral system. To elucidate the role of SHP-1 in TMEV infections in the CNS we propose the following specific aims. In specific aim 1, we will study the mechanism by which SHP-1 promotes iNOS expression in oligodendrocytes, astrocytes, and microglia with attention on possible tissue-specific differences in regulation of iNOS between these cells that relate to observed differences in virus replication in these populations. Second, we show that SHP-1 specifically inhibits Erk1/2 activation in oligodendrocytes and will study related mechanisms by which SHP-1 controls replication of TMEV especially at the translational level in specific aim 2. Third, we have shown that SHP-1 expression is induced during virus infections. The mechanism for virus-inducible SHP-1 at the level of the epithelial promoter 1 will be studied in specific aim 3. We believe that information gained under these specific aims will elucidate mechanisms whereby SHP-1 controls virus infections in oligodendrocytes and perhaps other cells of the CNS.